CEOs as leaders in a crisis: essential qualities for success

In recent postings, we’ve taken a close look at the role of the CEO in crisis management. In the final posting on this topic for now, we list some of the key qualities required by a chief executive in this context:

1) Leadership
Leadership is a quality one would expect from a CEO at all times, but the stakes are even higher in a crisis: it is the ultimate test for a senior management team. The outside world will re-evaluate the ability of the senior management team – and the worth of the business – dependent on how it manages the crisis. Demonstrating leadership and the cool-headed ability to make critical decisions under the most intense pressure are pre-requisites for success.

2) Empathy
A focus on and understanding of the effect of your crisis on impacted stakeholders is essential, and that requires a CEO who can listen as well as talk. Conversely, a focus on what the crisis means for our business, or worse, what the crisis means for me as CEO is guaranteed to alienate stakeholders and make a bad situation even worse. It’s one of the key reasons that Tony Hayward endured such a torrid time during his leadership of the BP crisis.

3) Strategic planning
Reacting to a crisis is rarely an effective approach – it means that the crisis manages the business rather than the other way round. So, an ability to be clear on the objectives for crisis management activity, to see into the future and therefore plan the best course of action are invaluable skills for a CEO in crisis management mode.

4) Integrity
Nothing does more damage in a crisis than double-talk or downright dishonesty. A CEO who is straight-forward, honest and acknowledges responsibility will retain credibility and therefore the ability to be heard during a crisis. This is essential if the organisation is to exert influence on how the situation plays out, and emerge unscathed at the other end.

5) Communication
If the CEO is to play the role of lead media spokesperson, they must be a supreme communicator. The words of the CEO will be tested, analysed and used against them if they slip up. And in an online age, we’re no longer talking about today’s press comment being tomorrow’s fish and chip paper. Twitter ensures that today’s gaffe has gone twice round the world by tomorrow and is preserved forever on YouTube and/or Google.

Being a CEO in a crisis tests business heads to the limit. People who have been successful when running “business as usual” can quickly find their world unravelling when crisis strikes. Others rise to the challenge, proving that they are not just great managers, but truly great leaders.

Crisis handling: the role of the CEO

CEOs wanting to protect the reputational value of their businesses are right to focus their time and attention on crisis prevention and crisis preparedness. Unfortunately, that doesn’t make their organisations immune to crisis (though it both reduces their likelihood and increases the business’s resilience to them). The good news though is that all the evidence suggests that it is not the fact of a crisis that causes reputational harm, but the way that the organisation responds to it. Make a hash of the crisis handling and reputation is sure to suffer. Manage it well (and in a way which is true to your brand) and reputation need not suffer. In fact, it can be enhanced.

As leader of the company and guardian of its reputation, the CEO undoubtedly plays a key role in crisis management. So what exactly can and should they do in order to protect reputation in the event of a crisis?

In a previous posting, I discussed the thorny issue of employing the CEO as lead media spokesperson in a crisis. To re-cap, in a crisis of monumental proportions (and certainly those where there has been loss of life), it is certainly right for the CEO to front up to the media. It shows the seriousness with which the organisation is taking the incident, it demonstrates accountability and it communicates leadership. For less serious incidents (and sometimes crises appear bigger from the inside than the outside) this may not be essential, or indeed desirable.

More important will be the ability of the chosen spokesperson to get their messages across effectively, so make sure your senior executives benefit from media training and know in advance who your strongest performers are. Do be aware that if despite this, you decide to field your CEO as media spokesperson you communicate a subliminal message that this is indeed a major event and you set the benchmark for all future crises. If the CEO is lead spokesperson in crisis A, stakeholders will expect the same in the event of crises B and C.

Whether or not the chief executive plays the role of external spokesperson, they are likely to have an important role with regard to internal communication. Crises can be highly debilitating and demoralising to staff: it’s not pleasant to have the organisation for whom you work accused of bad things. More than that, you may worry for your future employment. Given that staff can play a key role as front-line ambassadors and communicators in a crisis, it’s important that they remain committed and motivated. Regular updates from the CEO – via the intranet, email, video clips or face to face – help to maintain morale and reassure employees that the business is doing the right thing and will not be crushed by this incident.

Beyond communication, the CEO will have an important role within the crisis management team. The size and nature of this role will once again depend on the scale of the crisis, but there will be occasions when they need to make a big call. Crisis plans are there to help guide an organisation through an incident, but they cannot use judgement and they cannot make decisions. That requires human intervention. And when the decision in question has major ramifications for the long term reputation of the business, it requires CEO involvement. It’s when the top person earns their corn – and it may define their future career as well as the destiny of their business.

After the immediate incident or issue has been resolved, there’s another important task for the CEO. Re-building trust and reassuring stakeholders is often a key priority in the weeks and months after the crisis. By being visible and continuing to communicate during this period, the CEO helps ensure that long term reputational value is preserved.

There’s one final role that the CEO can play in crisis management: fall guy. Successful crisis resolution demands that the underlying cause of the situation is addressed: if ineffective leadership is identified as a key contributory factor then the only way forward may be a change of leadership at the very top. Not a decision that any CEO would want to take, but sometimes the only one possible if the future of the business is to be assured.

Leadership lessons in crisis prevention

If creating the right corporate culture is the number one priority for the CEO in reputation protection, there are other ways in which they can help to prevent and prepare for potential crises. Given that no CEO would welcome the drain on human and financial resources that a crisis brings - not to mention the potential damage to reputational value - focusing their attention in this area should be a no brainer.

The start point in reputation protection is for the CEO to emphasise the importance of crisis, risk and reputation management. This means creating an expectation and accountability that crisis management will be done well, and checking regularly to ensure that this is happening in practice. When the chief executive pays personal attention to a certain area of the business, it tends to focus the mind and ensure that the job gets done!

But real leadership is of course provided not just by what a CEO says, but more powerfully by what they do. So, being first in the queue for regular crisis media training and not only ensuring that a crisis simulation happens every six months, but participating in every single one will send out a very clear message that more junior team members will undoubtedly follow.

Further reinforcement can be provided through “management by walking around”. Regular visits to the shopfloor to check that people know what to do if they spot a problem and that they understand that communication channels are open will help to ensure that the boardroom principles of crisis management are making it through to the front-line.

There’s one other vital task that the CEO can undertake as chief reputation officer: ensuring that the reality of the business matches up with its brand promise. This matters at all times, but it matters most in the event of a crisis.

How do we know this? Well, when Oxford Metrica undertook its analysis of how crises affect the value of businesses, they discovered that the biggest value changes occurred when the crisis struck at the heart of the brand. In other words, if the nature of the crisis or the way in which it is handled runs counter to the way that the company had positioned itself, the damage to reputational value will be especially severe. So, if the brand is built on quality, a crisis that reveals shoddy products will be especially harmful. If the brand is built on safety, a major accident will be especially damaging. If the brand is built on integrity, a crisis that centres on corruption will be particularly hard to manage. It is the CEO’s job to make sure that the organisation’s brand is much more than skin deep or else it leaves the long term value of the business perilously vulnerable to the wrong kind of crisis.

Crisis prevention can easily slip down the list of CEO priorities as tasks which seem more important - or certainly more urgent – take precedence. Enlightened CEOs avoid this trap because they know that the time required to lead an effective approach to crisis prevention is not only tiny in comparison with that required to manage a live crisis, they also understand that to gamble with the company’s reputation is a risk too far.

Jonathan Hemus

Reputation protection in an online world

I was recently interviewed about the role of social media in crisis management and was asked whether it has changed the way that organisations deal with crises. My view is that the fundamental principles that underpin good and effective communication remain exactly the same. However, social media undoubtedly provides an expanded set of opportunities and threats when it comes to reputation management.

Let’s travel back in time just five years and imagine we witnessed a London Underground staff member being abusive to a passenger. What would have happened? We might have told the story to our partner over dinner that evening, saying how awful it was and that the member of staff should be disciplined. Maybe one person in a hundred might even have taken the time to write to Transport for London, though they would not have been able to identify the member of staff, and in any case, it would have been their word against his.

Travel back to the present day and here’s how a real incident at Holborn tube station plays out. The incident is not just witnessed by a passenger, it is also captured using his mobile phone. When he gets to work, he blogs about it and posts the footage to YouTube. People come across the footage and begin to Tweet about how disgusting the staff member’s behaviour is. Twitter users within the media spot the Tweets and begin to look into the story. By the middle of the afternoon, London Mayor Boris Johnson is tweeting about it (“appalled by the video. Have asked Tfl to investigate urgently. Abuse by passengers or staff is never acceptable”).

By the evening, the story had moved firmly from an online issue to a “real world” one, with coverage on Sky and ITN. The next morning the story was in the national newspapers including the Daily Mail and, of course, its website. The latter provides yet another opportunity for the story to endure and spread, fed by reader comments posted about the story (over 500 in the Daily Mail alone).

This was not a major crisis that lasted for weeks and destroyed the reputation of an organisation. It does however highlight how incidents which would once have resulted in a dinner table conversation between two people can now reach millions of people within hours. Understanding this and having a crisis communication infrastucture to deal with it is essential for any business seeking to protect its reputation in an online world.

Crisis management lessons from the volcanic ash cloud

The disruption caused by the recent volcanic ash cloud laid bare the crisis management plans not just of airlines and airports, but also every organisation whose people found themselves in the wrong place at the wrong time. Many organisations found this very hard to manage, and an article in the Economist highlights some of the risk management lessons to be learned from the incident.

As the article states, “volcanic ash billowing slowly across Europe probably did not feature in the risk management scenarios of many firms”. True enough, so what does this mean for crisis planning: should the conventional approach to risk assessment be torn up? No, but it does mean that the organisation needs to be ready for the completely unexpected crisis as well as the more predictable incident.

By this, I mean that conventional risk assessment – identifying the most likely events and their impact on the business – to guide scenario and contingency planning should endure. A food company that has no plan to deal with product contamination or an airline which lacks a protocol to manage a plane crash is foolhardy in the extreme.

So, planning for predictable, high impact risks is essential. But in addition, organisations need to plan for the unexpected crisis by focusing on the effect of a high impact crisis, not just its cause. During the recent incident, organisations that had already planned for a scenario of no flights in Europe for several days were ahead of those that failed to countenance this event. No one could have predicted that the cause of this might have been volcanic ash – it could have been a terrorist incident or a safety fear about all Boeing 737s for example – but that does not prevent planning for the effect of such an incident.

In tandem with this effect-led approach to crisis planning, organisations must also focus more strongly on the people element of crisis management. In a recent blog, I emphasised the importance of the human-factor in effective crisis management, and I make no apologies for raising the point again in this context. Well briefed, thoroughly trained, regularly rehearsed teams will make good decisions in a crisis, whatever the incident may be. The crisis manual may not cover volcanic ash, but the team will have the skills and insight to make the right decisions in any case.

I must also make mention again of the role of the organisational spokesperson. They are the face of the organisation at a time of heightened public anxiety and microscopic scrutiny and are crucial in risk communication and reputation protection. So, if we really value our organisation’s reputation, they must be carefully selected and undertake thorough and regular media training.

In this case, we saw multiple spokespeople from organisations including the airlines, the Met Office, National Air Traffic Services, travel companies and of course government: some were certainly more effective than others. Their success was based not just on the content of their argument, but crucially the ability of their spokespeople to communicate effectively. Any organisation that has not yet woken up to this fact needs to take action now, before the next crisis – volcanic ash or otherwise – emerges over the horizon.

How to avoid getting lost in the crisis wilderness

I recently stumbled upon an excellent blog posting by Peter Bregman, a management and leadership consultant, in the Harvard Business Review. It told of an expedition into the wilderness and how the party became lost by following a pre-defined trail rather than adapting their route based on their current situation and surroundings. Peter used the experience to illustrate how businesses can become fixated with their “plan”, ignoring opportunities which might have taken them to their destination much more quickly.

This analogy is especially true with regard to crisis management. Some organisations don’t bother planning for crises at all: they just cling tightly to their four-leaved clover and hope that bad things happen to the next man rather than them. Others take the time to develop a thorough crisis manual: hopefully it’s not too detailed or else it will never work in the heat of the incident (the most comprehensive and meticulous crisis manual that I have ever seen was awe-inspiring in its completeness, but ultimately ornamental rather than actionable in a crisis). And the most enlightened businesses also invest in regular crisis training and rehearsal.

Great processes and a well-trained team is the perfect combination: given the choice of one or the other, I’d go for the well-trained team every time. I know that skilled leadership and superb teamwork can bring an organisation through a crisis unscathed, even without a plan. A perfect plan without these qualities is never enough.

Peter’s blog reminded me of the criticality of crisis training – desktop exercises, media training, full simulations, briefings for front-line staff and so on – in order to protect the business from reputational harm. Because when you’re in the wilderness and a crisis strikes, a plan is very helpful, but it’s your people that will keep you safe.

Breaking the golden rule of crisis management

I used to believe the golden rule of crisis management: in a serious situation, the chief executive should always be the media spokesperson. Not any more.

Over the last year I’ve seen too many examples of chief executives making situations worse via their media appearance to be able to cling to this principle any longer. Of course, it can be an incredibly powerful way of communicating the right messages and showing leadership when the business needs it most. When the chief executive takes to the airwaves, high expectations are set: this most senior business person will surely come across as credible, confident and reassuring, the ultimate professional? And of course this is exactly why the corporation puts him (it usually is him) forward in the first place. Fielding the chief executive for a media interview underlines the seriousness with which you are taking the situation, your level of concern and your commitment to put it right. If your CEO has the ability to pull this off, then great. There’s nothing better than a business leader demonstrating responsibility at a time of crisis.

But what about if he fails to meet the mark? What about if he comes across as pompous or cold or nervous or defensive or uncaring? What about if he seems incapable of speaking in clear, simple down to earth language, free of jargon? What if his body language is so distracting that no one actually listens to the words he is saying? In any of these circumstances, one has to question whether the company is doing the right thing in offering up the CEO or MD for media interview.

And this conclusion is drawn not just from the perspective of the company, but also from that of anyone affected by the crisis. At a time of heightened concern, especially when safety or health may be a concern, it is vital that people receive clear, accurate information so that they can respond in the appropriate way. It’s not fair on them to put forward someone who cannot meet these critieria.

So, how do we address this? The first step is to identify the latent skill of the senior management team. This requires a media training session with senior managers to identify strengths and weaknesses, potential stars - and those that are simply not cut out for a media career. Thinking about the chief executive in particular, it is clear that he will be called upon to communicate on a regular basis, so whatever his basic skill level a programme to hone and enhance this is essential. Communication skills training plus one to one coaching are likely to provide the best solution.

This auditing of capability and constant improvement of skills enables you to put forward the right person in the right situation. If your CEO turns out to be a star, so much the better. If not, far better to put forward the sales director, head of HR or whomever else to represent the business in the event of a crisis. Doing so serves not only to protect your reputation but also to ensure that people get the information they need.